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PTIN Application Process for Preparers Without a Social Security Number

In Rev. Proc. 2010-41, released on October
26, the IRS provided a process for individuals without a
Social Security number to obtain a preparer tax
identification number (PTIN). Paid tax return preparers are
required to register with the IRS and obtain a PTIN, and
part of the PTIN registration process requires an individual
to submit a valid Social Security number. However, foreign
persons (who, for example, may prepare tax returns for U.S.
taxpayers who live abroad) may be ineligible to obtain a
Social Security number. There are also U.S. citizens who do
not have a Social Security number due to a conscientious
religious objection.

The revenue procedure sets forth
a two-part process by which such return preparers can obtain
a PTIN: First, they must complete either the IRS’s online
PTIN application or the paper Form W-12, IRS Paid Preparer
Tax Identification Number (PTIN) Application. Second, they
must also submit a completed Form 8946, PTIN Supplemental
Application for Foreign Persons Without a Social Security
Number, or Form 8945, PTIN Supplemental Application for U.S.
Citizens Without a Social Security Number Due to
Conscientious Religious Objection, and submit the additional
documentation outlined in the forms’ instructions.

Because complying with this two-step process, especially
the additional documentation requirements, may take time,
the IRS is allowing preparers who are foreign persons or
U.S. citizens without a Social Security number due to
conscientious religious objection additional time to comply.
The IRS will consider such return preparers to have complied
with the PTIN requirements if they complete the online
application or submit a completed paper Form W-12 by the
later of January 31, 2011, or 10 days after the first day on
which they prepare all or substantially all of a U.S. tax
return for compensation, and they submit a completed Form
8945 or Form 8946, including any required additional
documentation, within 60 days after the completion of the
online application or submission of the paper Form W-12.

Under this transition rule, such preparers will be
considered to be in compliance with the PTIN rules and may
prepare and sign U.S. tax returns and claims for refund
without providing a PTIN for returns prepared on or before
October 31, 2011.

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The package includes final regulations, guidance on how to calculate W-2 wages, a safe-harbor rule for rental real estate businesses, and new proposed rules on the treatment of previously suspended losses.

Don’t get lost in the fog of legislative changes, developing tax issues, and newly evolving tax planning strategies. Tax Section membership will help you stay up to date and make your practice more efficient.